Re: [OPE-L] The New Masters Of Capital: American Bond Rating Agencies And The Politics Of Creditworthiness

From: Michael Perelman (michael@ECST.CSUCHICO.EDU)
Date: Fri May 06 2005 - 23:38:35 EDT


Portnoy, Frank. 2003. Infectious Greed: How Deceit and Risk Corrupted the Financial
Markets (NY: Times Books).

This book covers the same subject, among other things.  Quite good.


On Fri, May 06, 2005 at 10:39:57AM -0700, Rakesh Bhandari wrote:
> Has anyone read this yet? rb
>
>
> (Cornell Studies in Political Economy)
> by  Timothy J. Sinclair
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> The New Masters Of Capital: American Bond Rating Agencies And The Politics Of
> Creditworthiness
> (Cornell Studies in Political Economy)
> by  Timothy J. Sinclair  "Contemporary American power is obvious to the casual
> observer..."=A0(more)
>
>
> List Price:
> $29.95
>
>
>
> Editorial Reviews
>
> Book Description
> In The New Masters of Capital, Timothy J. Sinclair examines a key aspect of
> the global economy=97the
> rating agencies. In the global economy, trust is formalized in the daily
> operations of such firms as
> Moody=92s and Standard & Poor=92s, which continuously monitor the
> financial health
> of bond-issuers
> ranging from private corporations to local and national governments. Their
> judgments affect
> unimaginably large sums, approximately $30 trillion in outstanding debt
> issues, according to a recent
> Moody=92s estimate. The difference between an AA and a BB rating may cost
> millions of dollars in interest
> payments or determine if a corporation or government can even issue bonds
>
> Without bond rating agencies, there would be no standard means to compare
> risks in the global
> economy, and international investment would be problematic. Most observers
> assume that the agencies
> are neutral and scientific, and that they interpret their role in narrowly
> economic terms. But these
> agencies, by their nature, wield extraordinary power and exert massive
> influence over public policy.
> Sinclair offers a highly accessible account of these institutions, their
> origins, and the rating processes
> they use to judge creditworthiness. Illustrated with a wide range of cases,
> this book offers a fresh
> assessment of the role of an often-overlooked institution in the dynamics of
> modern global capitalism.
>
>  From the Inside Flap
> "In this volume Timothy J. Sinclair systematically and thoroughly explores a
> major but little-known
> dimension of world affairs. The extensive expansion of international capital
> mobility in recent years has
> accorded bond-rating agencies a central place in the dynamics of globalization
> and Sinclair does a
> masterful job of explicating the various ways in which these new masters of
> capital exercise their power
> and perform their roles."=97James N. Rosenau, University Professor of
> International Affairs, The George
> Washington University
>
> "In The New Masters of Capital, Timothy J. Sinclair investigates the world of
> bond rating agencies. These
> private institutions have immense power, as their judgments can profoundly
> affect the financial
> conditions faced by corporations, cities, and countries. Their ratings can
> determine whether or not poor
> countries or struggling municipalities can borrow on private markets, a
> consideration of profound
> importance to their economic success. Sinclair explores how the bond rating
> agencies function, and
> how they can malfunction, as part of the broader international political
> economy. The New Masters of
> Capital will be interesting and informative for all those concerned to
> understand the operation of
> today=92s global financial markets.
>
> James Carville once famously said that when he was reincarnated he wanted to
> come back as the bond
> market, because =91then you can intimidate everyone.=92 If Carville had read
> Sinclair=92s book, he would have
> chosen to come back as a bond rating agency, because then he could even
> intimidate the bond
> market!"=97Jeffry A. Frieden, Stanfield Professor of International Peace,
> Harvard University
>
> "Timothy J. Sinclair offers an admirably jargon-free account of bond rating
> agencies. This book will be
> widely read, as it is the first to systematically tackle this aspect of the
> politics of economic
> globalization. The New Masters of Capital makes a strong and intriguing
> argument about the role of
> power and authority in the social construction of knowledge in international
> market settings."=97
> Kathleen McNamara, Georgetown University
>
>    See all Editorial Reviews
>
>
>
>
> Product Details
>
>
>
> Hardcover: 186 pages
>
> Publisher: Cornell University Press  (March 1, 2005)
>
> ISBN: 0801443288

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu


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